2025-VIL-1801-CESTAT-CHD-ST
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SERVICE TAX CESTAT Cases

Service Tax – Section 73(1A) of Finance Act, 1994 – Providing of services – Demand of tax – Appellant is a statutory authority established to satisfy needs of housing accommodation for general public – Appellant gets the houses constructed through contractors under Works Contract Scheme – On basis of balance sheet of Appellant, department raised demand under various category of services vide issuance of show cause notices – Adjudicating authority confirmed demands as proposed in show cause notices – Whether demand is sustainable when it is not specified under which specific category subject service falls – HELD – Show cause notice merely lists the services and alleges that impugned services fall under category of renting of immovable property, business auxiliary services and consulting engineering services without specifying under which specific category each of receipts falls and how it qualifies to fall under specific category of service. Impugned order also fails to establish under which of alleged taxable categories the impugned services sought to be taxed fall and therefore, demand cannot be confirmed – Appeals partly allowed - Issuance of statement – Whether Revenue can issue statement under Section 73(1A) of the Act when grounds relied upon for subsequent period are not the same as are mentioned in earlier show cause notices – HELD – Demand was proposed by merely issuing a statement under Section 73(1A) of the Act instead of issuing a proper show cause notice. Section 73(1A) of the Act required that grounds for issuing statement must be the same as the grounds of earlier show cause notice. New grounds such as construction services were introduced in statement which were not part of earlier show cause notice. Demand for FY 2012-13 raised under statement is set aside - Receipt from construction services – Entitlement of exemption – Whether Service tax is leviable on receipts pertain to construction services provided by Appellant to Departments of Government – HELD – Appellant qualifies as a Governmental Authority, as it has been established under 2004 Act and functions under full control of State Government. There are certain receipts which pertain to construction services provided by Appellant to various Departments of Government and they are mostly non-commercial works and are exempt under Sr.No.12(a) of Notification No.25/2012-ST, but Adjudicating Authority did not exclude value of non-commercial construction while computing tax liability. Demand confirmed under this count is set aside - Legal services – Applicability of reverse charge mechanism – Whether Appellant is liable to pay Service Tax on Legal Services under Reverse Charge Mechanisms (RCM) as per provisions of Notification No.30/12-ST – HELD – RCM is not applicable in present case, because Appellant is a Governmental Authority and does not fall under definition of ‘business entity’. Appellant is not liable to pay service tax for legal services under RCM as held by this Tribunal in case of The Housing Board Haryana - Construction of commercial buildings – Quantification of demand – Whether demand confirmed in impugned order on construction of commercial buildings is sustainable – HELD – Appellant has voluntarily agreed to pay demands on construction of commercial buildings during FY 2013-14 and 2014-15. Though Appellant has quantified demand on value of commercial construction, but for this purpose of quantification, matter needs to be remanded back to Adjudicating Authority. Matter remanded back to Adjudicating Authority, who will calculate service tax liability on commercial construction carried out by Appellant and thereafter, Appellant will pay same along with interest.
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